Follow Us:

IPEF Challenges

The IPEF is being viewed by many as a counterweight to the promise of prosperity doled out by Chinese ascendence. However, the question is whether IPEF is a sufficient effort or is it too little too late?


The recently concluded Quad summit in Tokyo Japan, has stirred the geo strategic world. In the context of the Coronavirus pandemic and the Ukraine crisis, it was an important summitlevel meeting where the future of the Indo Pacific was deliberated upon. The one significant outcome of the summit was the announcement of Indo Pacific Economic Framework for Prosperity.

Its aims include, inter alia, “to advance resilience, sustain ability, inclusiveness, economic growth, fairness and competitiveness” in the Indo-Pacific region. The verticals on which IPEF stands are – Trade including Digital economy; Supply Chains including access to key raw and processed materials; semiconductors; critical minerals; Clean Energy; Decarbonization and Infrastructure, and Tax and Anti-Corruption. The members of IPEF include India, Australia, Brunei Darussalam, Indonesia,

Japan, Republic of  Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, the USA and Vietnam. Prima facie, the creation of IPEF is aimed to provide aviable economic alternative to like-minded countries in the Asia Pacific that have a vested interest in a democrat ic, free, and open Indo Pacific.Concomitantly it can be argued that IPEF is also trying to balance the rise of China and offsetting any untoward outcome due to Chinese ascendance.

In this context, there is a little doubt now that China has risen and its assertion within the region has been felt by almost all its neighbors. The trouble in the South and East China Seas, especially the new maritime law in China which came into effect on 1 September 2021 is a case in point. The new Law seeks foreign vessels to notify Chinese authorities upon entering ‘Sea areas under the Jurisdiction of People’s Republic of China’ in place of the erstwhile ‘Coastal waters.’ It means that the Chinese authorities have changed the definition of their territorial waters. It has a grave implication for Southeast Asian countries that share their maritime borders with China as these now become unsettled.

The Chinese military build-up in the high Himalayas is another area of concern as its southern border with India has been simmering since May 2020. Together these events have disturbed the tranquility in the Indo Pacific region. Besides the military aspect, Chinese Dollar diplomacy hasbecome another cause for concern. Chinese attempts to create a regional framework to support its rise with the help of its $3.2 trillion forex events for some and sounds alarm bells for other countries in the South and Southeast Asian region. Economic crisis in Sri Lanka is a burning example of these chickens coming home to roost. In this context, the IPEF is being viewed by many as a counterweight to the promise of prosperity doled out by Chinese ascendence. However, the question is whether IPEF is a sufficient effort or is it too little too late? The efficacy of this forum is being questioned for many reasons, including the fact that it took almost five years for Quad countries to come together to declare even the intention to have an economic forum which could be a viable alternative in the Asia Pacific.

In times such as the post Covid era, when the world is looking at a potential recession, there should have been far more active work done to promote IPEF as an ideal economic forum in the Indo Pacific which adheres to democratic and liberal principles. Secondly, there is still no modus operandi for IPEF defined in the declaration; it is still hanging in thin air and there is no actionable institutional apparatus in place. The declaration calls for discussions among member countries on the defined areas. How much time and what outcomes should be expected from these discussions is still in the big unknown.

Thirdly, it only reflects the ad-hocism on the part of the USA with regard to the Indo Pacific. The Biden Administration has been in office for more than a year, and yet it has done precious little to consolidate the Quad group and has done lesser still than what the previous administration had achieved.

Clearly, Quad has not received due attention from the present US government. The lack of clarity in IPEF only adds to this unresponsiveness to the issues of concern in the Indo Pacific. Coupled with the challenge posed by the Regional Comprehensive Economic Partnership sponsored by China, the IPEF will face an uphill task to establish itself in the region. Furthermore, the success of IPEF depends on the likemindedness of the memberstates on all issues of concern.

There is a need to understand and appreciate the national interests of all member countries, and the peculiar circumstances in which every nation functions. However, this has been an elusive bird. This fact became amply clear especially in the context of the evolving situation in Ukraine, where many countries were pressurized to pick sides by warring parties and their supporters.

What the Ukraine crisis did was to reiterate the fact that every nation must look after its interests and ideational tilts can only come after that. In fact, the countries asking others to impose sanctions were themselves guilty of breaking the economic sanctions to ensure their national interests. It only brought in focus the fact that whereas there is a unanimous focus on China, the approach towards the Ukraine-Russia issue is divided.

Taiwan is another area, where streamlining of stances is important given the contradictory public statements made by President Biden in Tokyo. In place of strategic ambiguity, the Biden Administration should aim for strategic clarity with regard to Taiwan and the US resolve to protect it against Chinese aggression. There is also a greater need  for cooperation and mutual trust among partners to promote camaraderie. For countries like India, the sailing was not smooth at Tokyo; the country faced heat on its conscious decision to restrict exports of wheat and sugar against the backdrop of rising commodity prices internationally.

The US on its part pressurised India to ‘do more to shoulder international burden’ to ensure food security globally as 30 per cent wheat supplies from the Baltic region would not be available owing to the conflict between Russia and Ukraine. However, India is going through an exceptionally hot summer with contraction in the wheat production to10.5 million metric tonnes. In the face of mounting inflation, India has  mammoth task of feeding her 1.3 billion population. Even with this challenge, the country has contributed 50000 metric tonnes wheat to the World Food Programme for Afghanistan and 10000 metric tonnes of food grains to be given to Myanmar.

India is also supporting Sri Lanka in its hour of crisis by sending food grains and medicines as aid.On the other hand, USA has produced over 40 million metric tonnes of wheat in this year. With such a bumpercrop, it should step up to feed the hungry of the world. These issues only indicate the unsettled undercurrents of Quad. For a better functioning of the group it is important that the divergence of interests among partners should be reduced.

As External Affairs Minister S. Jaishankar noted at GLOBSEC 2022, India is committed to help the poor countries with wheat and other necessary items, but it must not mean that by forcing India’s hand the advanced countries should hoard their resources, the way it happened with the vaccines for corona virus. There should be responsible approach in place with a focus on relative capacities and needs of countries.

As far as the success of IPEF is concerned, India is uniquely positioned to thrust  the forum into higher tragic stories, especially in the field of  futuristic technologies, including the semiconductor industry. With an advantage of an efficient workforce in the IT industry and surplus young labour, India can shoulder the burden of global value chains. It is in consonance with the four pillars of IPEF. More importantly, in light of Chinese assertiveness, the need for diversified global manufacturing has been acutely felt. To establish a diversified and reliable global supply chains in crucial materials and technologies, India will invariably play a pivotal role.

However, all of it will only become a reality when countries reap the benefits of early harvest and the IPEF swiftly takes off from the ground. In the fast-changing geo-political scenario in Asia Pacific, the slow and steady may not win the race after all.